Considerations for Loan Portfolio Assessments Energy and Power Sectors GHG Emissions Public Disclosure Review public disclosures such as sustainability reports or submissions to the CDP Climate Change Questionnaire and supplement with direct engagement with clients GHG Emissions Reduction Targets Review public statements on net zero/decarbonization commitments or alignment with external initiatives such as the Science Based Targets initiative. For the Energy sector, assess targets for GHGs such as methane Decarbonization/Transition Plan Understand clients’ climate transition plans. Determine the tools that clients will employ, including capital allocation, product diversification and linkages to executive compensation Climate Risk Scoring Harness public discourse and statements and third-party data as well as our ongoing client engagement, to develop an internal assessment for both transition and physical risk Client Asset Evaluation Where available, review asset-level data for further assessments of climate risk and emissions intensity; this is particularly applicable to project finance External Climate Scores Reference third-party ratings systems for additional data on climate-related performance Other Data Consider the social elements of transition, including human rights risks, access to energy for developing countries, livelihoods of communities and workers in these sectors and the relevant regulatory environment Scopes 1 & 2 (absolute emissions & physical intensity) Scope 3 Baseline year Status of data verification Net zero commitment or science-based targets GHG emissions reduction targets Methane reduction targets Flaring reduction/phase-out targets Scope 1 decarbonization plan Scope 2 decarbonization plan Evolution of energy sources Product diversification and Scope 3 reduction Capital allocation Governance — accountability, compensation links Transition risk assessment Physical risk assessment Existing generation assets (carbon intensity analysis) Existing reserves and assets Comparative economics of production Carbon-intensive asset retirement schedule Resilience risks PACTA Score CA 100+ Score World Benchmarking Alliance Carbon Tracker Initiative Transition Pathways Initiative Sustainable development factors Country/regional regulatory environment The first step of our net zero plan involves engagement, client by client, to understand each client’s GHG emissions disclosure and their perspective and plans for transition. Additionally, we will review public disclosures, climate governance and the commit - ments and actions they have taken to date. We anticipate that this initial review phase will continue through the end of 2023. In the following table, we highlight some of the key considerations that will frame client engagement. APPLICABLE TO BOTH SECTORS POWER SECTOR ONLY ENERGY SECTOR ONLY Contents ESGatCiti SustainableFinance SustainableProgress Equitable&ResilientCommunities Talent& DEI RiskManagement&ResponsibleBusiness Appendices CITI 2021 ESG REPORT 39